Hassan to issue freeze on hiring, out-of-state travel in response to low revenues

Concord — Gov. Maggie Hassan is issuing an executive order to freeze hiring, equipment purchases and out-of-state travel for government agencies in response to falling state revenues, which were $22 million below projections in April.

Hassan will present and seek approval of the order from the Joint Legislative Fiscal Committee at its meeting next Thursday. In a letter to committee Chairwoman Mary Jane Wallner, a Concord Democrat, Hassan urged the legislative and judicial branches to institute similar freezes, and Wallner said yesterday the House will take similar measures.

In March, the state was ahead of revenue projections by $25 million. But that has now dropped to a $3.9 million surplus, as April revenues from business taxes and the interest and dividend tax came in well below projections. Revenue from the real estate transfer tax, meals-and-rooms tax and rental tax still came in above projection.

“As New Hampshire’s employment and economic picture continue to improve, the Department of Revenue Administration will need further data and further analysis to determine whether this is a short-term drop or a long-term trend. But given the limited information, we should act prudently, responsibly and expeditiously to continue to ensure a balanced budget for the biennium,” Hassan’s letter said.

Hassan’s call for the freeze quickly became political, with Democrats saying the drops in revenues came from changes to the tax code under last session’s Republican leadership. Republicans, however, said action should have come sooner.

“I appreciate the governor’s long overdue announcement of a plan to restrict state spending. As she recognizes in her letter, the issues facing our state today are not revenue problems, they are spending problems,” Senate President Chuck Morse, R-Salem, said in a statement.

Morse also said he hoped Hassan’s announcement would “put to bed” attempts to use some of last biennium’s $15 million surplus to fund back-of-the budget cuts to the Department of Health and Human Services. Republicans want to send all of the money to the state’s rainy day fund, but the House voted against doing that again yesterday.

Wallner, however, said she thought Hassan’s actions were proactive.

“We applaud the governor’s proactive planning and believe it is a demonstration of responsible budget management. The House will join the governor in her efforts by taking belt tightening measures,” she said in a statement.

A waiver process will be in place for agencies that wish to make hires. This freeze-and-waiver plan was first adopted by former governor John Lynch for the 2009 and 2011 budgets. It was still in place for Hassan’s first six months in office, and she issued roughly 180 hiring waivers in that time, compared with more than 200 by Lynch in the first half of fiscal year 2013.